Healthcare spend strategy: Start early this year

Maybe you had other plans: visiting a tropical island, blowing your entire savings on NBA playoff tickets, or perhaps getting a jump on the Q2 close.

In any case, let’s assume you weren’t at the CFO Leadership Council’s spring conference last week, when CFOs and finance professionals descended on Boston to discuss best practices for uncertain times.

No need for FOMO. Below, we’ve compiled some of the best tidbits of advice we heard at the conference. Think of it as a work event in chill mode: no travel, no small talk, just three of the most useful takeaways.

Healthy choices. Perhaps you’ve heard: Rising healthcare costs are giving CFOs insomnia. The average increase in the cost of health benefits is expected to climb to a 15-year high of 6.7% in 2026, according to a survey from professional services firm Mercer.

During a keynote session on the drivers of higher healthcare costs (photo above), Marybeth Gray, SVP of health and welfare benefits consulting at Marsh McLennan Agency, stressed the importance of opening up to change.

“The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic,” Gray said. Improving healthcare spend “is going to require change, and it is going to require very thoughtful three- to five-year planning, where you’re biting things off in little chunks,” she added. “You can’t eat the whole apple in one bite.”

To that end, she recommended opening up pathways of communication early (and keeping them open). “This is the year that we need to start early. We need to develop a list of cost drivers that we’re solving for, because if you don’t have that, you don’t know what the right strategy is,” she said.

“It’s not hard to do this, but you should be tracking things in a three- to five-year financial plan; you should be looking at what the employer’s cost for healthcare is, the employee payroll deduction piece for healthcare, the employee piece for out-of-pocket deductible utilization, and building out your budget and trying to figure out how to close the budget gap by those little bites of the apple,” Gray explained.

Certainly uncertain. Emily Mandel, senior economist and associate director of Moody’s Analytics, emphasized open communication with respect to a very different topic: the global economy.

After walking attendees through some of the major factors shaping the current economic picture, such as the Iran war, deglobalization, and supply shocks, Mandel was asked how CFOs lead their organizations and employees through it. Her reply: Take advantage of visibility.

“One of the things about the current situation, the current challenges that the economy is facing, is that they’re fairly visible,” Mandel said. “[Employees] understand that it’s a very challenging environment.”

“The main thing that’s been holding back the economy…is just the basic sense of uncertainty,” she continued. From a CFO perspective, the primary goal is “addressing that uncertainty and thinking about the different scenarios that this could take,” while being up-front with employees about the unknowns.

Us vs. them. During a panel about how CFOs are using fractional finance talent to support growth, panelists Ottavio Siani, fractional CFO and owner of Triangle Coffee, and Aira Pineda, CFO of Scrubbed, an outsourced professional services firm, shared advice on handling the potential friction between fractional and internal teams when starting a new engagement.

“Typically, there’ll be a leadership team, CEO, COO, whoever it is, who’s decided to reach out to me and say ‘We have serious problems; can you help solve them?’” Siani said, in reference to a typical fractional CFO role.

“Oftentimes, the finance team is not able to do a good job because they haven’t been set up properly, they haven’t been resourced properly, the leadership team is asking too much of them in some respect, or isn’t helping them organize their time effectively,” he added.

“In the first month or so, it’s an exercise of convincing folks that I’m here to support the finance team,” rather than “outsource their jobs, and then let everybody go,” which is often the fear, Siani said.

That emphasis on how everyone will benefit from camaraderie is key, Scrubbed’s Pineda added.

“Most of the time, at least for the projects that I’ve done when I was a fractional CFO, people are struggling,” she said. “They need a lot of help…they need a team to supplement their capacity, and you come in, you make their lives easier, and then everyone’s achieving what they need to achieve, and it kind of makes the line disappear between outside firm and internal. It shouldn’t even exist.”